On 4 October we said that “American Airlines Bankruptcy Rumors Premature,” but apparently they were nonetheless correct. The company issued a press release on 29 November 2011 which said, “AMR Corporation (“the Company”), the parent company of American Airlines, Inc. (“American”) and AMR Eagle Holding Corporation (“American Eagle”), announced that in order to achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability and ability to continue delivering a world-class travel experience for its customers, the Company and certain of its U.S.-based subsidiaries (including American and American Eagle), today filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.”
The company says that despite the bankruptcy filing, it has $4.1 billion, that’s billion with a B, on hand to cover its operations during reorganization.
Further, according to the press release, American Airlines says that during the bankruptcy proceedings:
American and American Eagle expect to continue to:
- Provide safe and reliable service;
- Fly normal schedules;
- Honor tickets and reservations, and make exchanges and refunds as usual;
- Fully maintain AAdvantage frequent flyer and other customer service programs, and ensure all AAdvantage miles and elites status earned by members remain secure and intact;
- Provide Admirals Club access and similar amenities to members and eligible customers;
- Remain an integral member of the oneworld® alliance, of which American is a founding member, and continue its codeshare partnerships;
- Provide employee wages, healthcare coverage, vacation, and other benefits, without interruption; and
- Pay suppliers for goods and services received during the reorganization process.
Some analysts have already said the American Airlines bankruptcy will result in higher prices for airline tickets on routes they serve.